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Analyst: Amazon NFL Pact Could Lead to More Sports Deals

(Image credit: Amazon)

Amazon’s renewal of streaming rights for the NFL’s Thursday Night Football package could pave the way for the retail giant to expand its sports portfolio, including possibly bidding for the league’s Sunday Ticket out-of-market games package, according to at least one analyst.  

Amazon agreed on Wednesday to renew its TNF package for three years, including gaining exclusive streaming access to a Saturday game later in the season. Terms of the deal were not disclosed. 

“I think that potentially bodes well for them in terms of other packages that might be available, such as Sunday Ticket,” said LHB Media, Sports & Entertainment president and CEO Lee Berke of the Amazon renewal. “It definitely works well from a bandwidth standpoint, from a distribution standpoint, for steamers in general. It sure seems like Amazon has a strong relationship with the NFL going forward.”

Sunday Ticket rights are currently held by AT&T’s DirecTV satellite TV unit, but the telco has said in the past that it may be willing to let the package go to another distributor. 

The three-year deal gives Amazon the digital rights to distribute 11 TNF games to its nearly 150 million Amazon Prime subscribers in more than 200 countries. The games will be aired on broadcast television by Fox Corp., as well as the NFL’s own NFL Network.  

In addition, Amazon will get exclusive digital rights to one Saturday game in the second half of the 2020 regular season. That game also will be aired on broadcast TV, in keeping with the NFL’s long-standing commitment, in the participating teams’ home markets. 

Amazon has obviously deep pockets -- 2019 revenue was $280.5 billion -- and has been lumped together as a potential buyer of more comprehensive sports rights for years. But so far, the company has failed to make a major commitment.

Amazon's last two-year deal with the NFL for TNF rights cost an estimated $65 million per year. And while the most recent renewal is expected to have been for a higher price, it is still dwarfed by the billions of dollars broadcasters and cable sports networks pay for rights annually.

Berke added that Amazon’s willingness to renew the TNF deal could point to a broader commitment from the online giant in the future. 

“Amazon at this point can buy whatever they want to buy,” Berke said. “In addition to that, they’re going back to the well for additional NFL content before all of the other packages have been negotiated out.”

The league has tried to encourage participation from streaming services for years. As current trends point to the viewership shift from traditional pay TV distribution to streaming video accelerating, this may be as good a time as ever for Amazon and others to get involved in sports rights.  

“The NFL has done a lot of streaming experimentation over the years -- Twitter, Yahoo,” Berke said. “Each time the packages have built up in terms of content, in terms of dollars. Amazon seems to be specifically poised to be an aggressive bidder for whatever is available from a streaming standpoint going forward.”

Thursday Night Football drew an average audience of 15.4 million viewers on Fox, the NFL Network, FOX Deportes, NFL digital, FOX Sports digital, Prime Video, Twitch, and Verizon Media mobile properties in 2019, a 4% increase compared to the prior year. About 1 million of those viewers watched via streaming on Amazon Prime, Twitch, NFL digital, Fox Sports digital and Verizon mobile properties, up 43% increase over the prior year. 

"As our relationship has expanded, Amazon has become a trusted and valued partner of the NFL,” NFL chief media and business officer Brian Rolapp said in a press release. “Extending this partnership around Thursday Night Football continues our critical mission of delivering NFL games to as many fans in as many ways as possible both in the United States and around the world."

While the COVID-19 pandemic has forced the cancellation of the NBA and NHL regular seasons and has postponed major league baseball play, the NFL is expected to begin its regular season relatively on time. Some reports have said the league is considering opening its regular season, originally slated for September, in mid-October, minus buy-weeks. That, according to most pundits, would allow for a minimal disruption of the regular season and playoffs, with the Super Bowl to be played in late February. 

"We are thrilled to renew our Thursday Night Football deal with the NFL, and are excited to expand our relationship to include exclusive global streaming rights to an additional regular season game in 2020," said Amazon vice president of global sports video Marie Donoghue, in a press release. "We know Prime members and the Twitch community around the world love the NFL, and we remain committed to giving them the best and most customizable streaming experience possible, with a broad selection of premium content available at their fingertips."

The NFL has already begun negotiations for broadcast rights for the 2023 season and MoffettNathanson media analyst Michael Nathanson has estimated pricing could rise as much as 75% for the new deals.